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Life Health > Life Insurance

Supreme Court takes up LTD statute of limitations case

By Allison Bell

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The U.S. Supreme Court has taken up a case that could affect how federal courts apply statutes of limitations to cases involving group disability plan benefits decisions.

Julie Heimeshoff, the appellant in the case  Heimeshoff vs. Hartford Life and Wal-Mart Stores Inc. (Case Number 12-729), worked in public relations at Wal-Mart. In August 2005, she filed a group long-term disability (LTD) insurance claim, saying that she was unable to work due to lupus and due to pain from fibromyalgia.

Hartford Life, a unit of Hartford Financial Services Group Inc. (NYSE:HIG), denied the claim in November 2006. Heimeshoff appealed in September 2007, and she said Hartford again denied the claim in November 2007, according to court documents.

Heimeshoff filed a suit against her employer and the insurer in November 2010 in the U.S. District Court in Connecticut.

Hartford Life said the LTD policy required Heimeshoff to file her suit under a Connecticut statute of limitations that required her to began any legal actions within three years after the date when she was supposed to give the company proof of her loss, rather than three after the date when the claim accrued. 

Heimeshoff argued that the statute of limitations argument should not apply because Hartford Life was basing the argument on a time limit document — the policy — that was not part of the complaint. Hartford Life contended that it could refer to the policy in the motion to dismiss the suit because Heimeshoff had included the policy in her complaint.

Heimeshoff also argued that Hartford Life should have explained the time limits for filing a civil action in its denial-of-benefits letters.

The district court ruled in favor Hartford Life and Wal-Mart and dismissed the suit in January 2012.  

A 3-judge panel at the 2nd U.S. Circuit Court of Appeals upheld the district court through a summary order in September 2012.

The Employee Retirement Income Security Act of 1974 (ERISA) “does not contain a specific limitations period for challenging the denial of benefits,” and the parties must use the “most nearly analogous state limitations statute,” the appeals court said, citing language from a 2009 2nd Circuit ruling.

“Hartford’s plan provided that its three-year limitations period ran from the time that proof of loss was due under the plan,” the 2nd Circuit court said. “The policy language is unambiguous. and it does not offend the statute to have the limitations period begin to run before the claim accrues.”

Because Heimeshoff’s lawyer had received a copy of the plan containing the limitations provision before her time to bring the claim had expired, she “is not entitled to equitable tolling” just because the denial-of-benefits letters had not explained the three-year time limit on going to court, the court said.

The questions presented in the request for Supreme Court review were:

  • When should a statute of limitations accrue for judicial review of an ERISA disability  adverse benefit determination?  
  • What notice regarding time limits for judicial review of an adverse benefit  determination should an ERISA plan or its fiduciary give the claimant with a disability claim?  
  • When an ERISA plan or its fiduciary fails to give proper notice of the time limits for  filing a judicial action to review denial of disability benefits, what is the remedy? 

The Supreme Court said it will take up only first question presented — about when a statute of limitations should accrue for judicial review of an ERISA disability adverse benefit determination.

Hartford Life said in a statement that most federal courts have enforced time limit provisions like the one in the Hartford Life plan involved in this case.

“The trial and appellate courts found that The Hartford’s plan language was reasonable and enforceable,” the company said.

Representatives for Heimeshoff were not immediately available to comment on the case.

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